Teach the Vote: Where Texas Educators Find the News that Matters Most

Tag Archives: Glenn Hegar

Texas Governor Greg Abbott announced a total of six emergency items in Tuesday’s State of the State address to a joint session of the 86th Texas Legislature. The State of the State is traditionally delivered by the governor at the beginning of each legislative session, and is the state equivalent to the national State of the Union address delivered by the president.

The governor often uses the State of the State as an opportunity to announce emergency items for the current legislature. The first 60 days of the legislative session are meant for organization and bill filing, and legislators cannot vote on bills until after 60 days have passed. Emergency items declared by the governor are the only exception.

Standing ovation for teacher pay announcement during State of the State address, Feb. 5, 2019.

What does this mean functionally? The legislature may vote on bills under these emergency headings immediately instead of waiting for the March 8 deadline, theoretically granting them a one-month head start ahead of other bills. Yet few of these bills have been filed, and none have begun the committee process that marks the first major step in a bill’s journey to becoming a law. For this reason, the practical impact of designation as emergency items has more to do with sending a signal to legislators and the public that these are the governor’s top priorities.

In addition, each of these items is expected to require a significant amount of state funding. The budget offered by the Texas House would provide $7.1 billion in new revenue for public education, contingent upon spending a significant portion of that money on providing property tax relief, ostensibly by rebalancing the state and local share of education funding. Increasing the state’s share will ease the burden on local property taxpayers, but will not increase overall public school funding. To increase overall school funding will require spending additional money on top of what is required to ease local tax pressure.

Increasing teacher pay will require another tranche of state funds. The Texas Senate has proposed Senate Bill (SB) 3, which would grant teachers a $5,000 annual raise. The bill’s cost is tagged at $3.7 billion for the first biennium. Gov. Abbott’s comments today on teacher pay implied that he prefers a plan under development by House leaders to provide a differentiated pay program that could create a path for select teachers to earn as much as $100,000. This would apply to far fewer teachers than the Senate’s plan and consequently carry a much smaller price tag.

School safety, mental health, and disaster response will each require further funding. Fortunately, the biennial revenue estimate delivered by Texas Comptroller Glenn Hegar in January projects legislators will have roughly $12 billion more than they budgeted the previous two years. It’s important to note that some of that money will be taken up by inflation and population growth. Some of the emergency items, such as disaster response, are prime targets for one-time spending from the Economic Stabilization Fund. The state’s “rainy day fund,” as it is often called, is projected to total $15.4 billion by the end of 2021.

Texas Comptroller Glenn Hegar announced Monday that the 86th Texas Legislature is forecast to have $119.12 billion available for general-purpose spending when the regular session begins tomorrow, Jan. 8, 2019.

The announcement came today as part of the comptroller’s biennial revenue estimate, which is delivered to legislators before each session begins and consists of a forecast of how much revenue the state expects to receive and how much of it can be spent.

The state is projected to take in $107.32 billion in general revenue-related tax collections in the 2020-2021 fiscal biennium, which is up from $99.27 billion collected in 2018-2019. The next biennium begins with a balance of $4.18 billion carried over from 2018-2019, along with $14.16 billion in additional general revenue-related collections. A total of $6.34 billion of available revenue is reserved for transfers to the economic stabilization fund (ESF), also known more commonly as the state’s “rainy day fund,” as well as highway funds.

Legislators began 2017 with a $104.9 billion BRE, and the 85th Texas Legislature ultimately passed a $107.2 billion budget. The 2018-2019 revenue estimate was revised upward several times as economic conditions improved. In the 2020-2021 revenue estimate, Hegar noted increased economic growth in 2018 fueled by oil production in the Permian Basin, but urged caution looking beyond the 2019 horizon.

“Looking ahead to the 2020-21 biennium, we remain cautiously optimistic but recognize we are unlikely to see continued revenue growth at the unusually strong rates we have seen in recent months,” Hegar wrote in the official report. “Oil prices have dropped sharply since October, financial markets have demonstrated increased volatility, interest rates have been rising and U.S. trade policy remains uncertain. As the nation’s leading export state, the Texas economy in particular is exposed to potential reductions in international trade.”

“Because of this heightened uncertainty, this revenue estimate is based on a projection of continued but slowing expansion of the Texas economy,” Hegar concluded.

Much of the $119.12 billion legislators will be have for budgeting the next two years is already spoken for. The Center for Public Policy Priorities (CPPP) correctly points out in its BRE analysis that legislators will have to immediately make a $563 million back payment to Medicaid, funding that was deferred last session in order to fund public education.

CPPP predicts it will cost roughly $112 million for the state to maintain the current level of services, based upon factors including inflation and school enrollment growth. Legislators will also have to decide where to find $2.7 billion of supplemental funding for Hurricane Harvey recovery costs. That could come out of general revenue or the rainy day fund.

The Teacher Retirement System (TRS) of Texas board of trustees held multiple meetings this week in Austin.

Highlights of the quarterly meetings included discussions of new rates and policy designs for TRS-ActiveCare for the 2019/2020 school year; the need for increased authorization to hire additional full time employees (FTEs) at the agency; the introduction of the new TRS Communications Director; and a discussion of and failed vote on lowering the TRS pension fund’s expected rate of return.

ATPE Lobbyist Monty Exter attended both the committee and board meetings and penned this wrap-up for our Teach the Vote blog earlier today.

The House Public Education Committee held an interim hearing on Wednesday. Topics discussed included the continuing impact of Hurricane Harvey on the state’s public schools, plus implementation of recent education-related bills dealing with school finance, the accountability, system, and student bullying.

Commissioner of Education Mike Morath updated the committee on the state and federal governments’ response to Hurricane Harvey and the 1.5 million students in its affected school districts. Morath indicated that he will propose a new commissioner’s rule in June to provide a plan for accountability waivers for school districts that were forced to close facilities and suffered the displacement of students and staff.

The committee also heard testimony about the controversial “A through F” accountability system that is being implemented in Texas. School districts will be assigned A-F ratings in August, while campus A-F ratings will be released the following year. A number of witnesses during Wednesday’s hearing expressed concerns about the new rating system and its heavy emphasis on student test scores.

With interim committee hearings in full swing this month, paying for Texas public schools and teachers remains a hot topic.

On Wednesday, the House Appropriations Committee heard from Texas Comptroller Glenn Hegar and others about the status of the state’s Economic Stabilization Fund, often referred to as the “Rainy Day Fund.” Read more about recommendations being made for use of the fund to support the state’s funding needs in this blog post from ATPE Lobbyist Monty Exter.

The Texas Commission on Public School Finance also convened again this week, with a Thursday meeting focused on tax policy issues and sources of funding for the state’s school finance system. ATPE Lobbyist Kate Kuhlmann has a rundown of that meeting here. She also shared the below update from today’s Expenditures Working Group meeting which covered the cost of education index, compensatory education, and the transportation allotment.

One unsurprising word could be used to summarize testimony from invited panelists at this morning’s Expenditures Working Group meeting: update. On all three topics discussed, expert witnesses pointed to updating both the methodology behind the funding tied to each topic and what each topic intends to address. For the cost of education index, Texas A&M University Bush School Professor Lori Taylor noted that the index is based on teacher salaries and employment patterns from 1990. Taylor is the same expert behind a recent Kansas study on school finance, which determined that state should invest an additional $2 billion in school funding. During this morning’s meeting in Austin, Taylor and the other panelist agreed the cost of living index has value, but needs significant updating; it was suggested that to better account for evolving costs of education, the commissioners should consider recommending a requirement that the state update the index (or even the entire finance system) every 10 years.

Similarly, school districts and other school finance stakeholders pointed to the need for better targeted funding for students supported by a broader category of compensatory education services, and the legislative budget board shared different way to approach funding transportation costs. Watch an archived live stream of the full meeting here for more on the discussions.

Before each session, legislative budget writers wait with bated breath to hear the state comptroller hand down from on high the magic number that will guide their spending for the next 140 days. That number comprises the core of the biennial revenue estimate (BRE).

The comptroller is basically the state’s top accountant, and crafting the BRE is the office’s biggest responsibility. Divined from tax receipts and economic trends, the BRE is a best guess as to how much tax money will be available for lawmakers to spend over the next two years. The legislature is legally bound to keep spending within that number, which makes an austere forecast about as welcome as a skunk at a garden party.

At a formal press conference this morning at the Texas Capitol, Comptroller Glenn Hegar’s BRE presentation for the 2018-19 biennium was marked by a subtle, yet unmistakably skunky fragrance.

Hegar announced the 85th Texas Legislature will have $104.9 billion available for general revenue spending, roughly $8 billion less than lawmakers got the green light to spend in 2015. Factors contributing to the pinch include sluggish growth in tax revenues – due in no small part to stubbornly low oil prices – and lawmakers’ decision last session to dedicate $5 billion in sales tax revenue to the highway fund.

According to the Texas Tribune, state Rep. Drew Darby (R-San Angelo), who appears poised to chair the House Appropriations Committee, suggested the number is $5 billion to $6 billion less than it would take to fund state services at current levels. Combine that with the governor’s directive that each agency cut its budget by four percent, and a picture of a penny-pinching budget battle takes shape.

When money is tight, we find out what our priorities are. We at ATPE believe investing in future generations should be at the top of the list.

Public education still hasn’t fully covered the $5.4 billion cut by the legislature in 2011. With enrollment growth outpacing teacher hiring, class sizes continue to increase, to the detriment of students. Per-student funding still lags 2011 levels in some districts. To top it off, the state has steadily decreased its share of school spending, forcing school districts to rely more and more on local property taxes to make up the difference.

But there is still room for optimism.

Even without a court mandate, House leadership under Speaker Joe Straus (R-San Antonio) has expressed a strong desire to fix the school finance system this session. There’s been growing talk of increasing the basic per-student allotment. If a friendly Republican administration in Washington, D.C. provides relief in previously disputed areas of the budget, such as health care and border security, the result could be more state money freed up for other priorities.

It’s a matter of deciding what’s important.

Our children deserve a world-class education that doesn’t cost parents their home. If lawmakers truly want to cut property taxes, there’s a simple fix: Shift the burden of education funding back to the state. It will require taking a hard look at the budget and making tough choices about public spending, but it can be done. We’re optimistic that Texans will keep their eye on the ball this session and not be distracted by repackaged voucher schemes, teacher bashing bills, and smoke and mirrors tax cuts.

If we can maintain that focus, then we’ll end up with a budget that reflects our values as Texans.